Breaking Down the Budget with Float Scope (BFS) Contract Model

Interview with Vitaly Hornik, COO of XB Software: Breaking Down the Budget with Float Scope (BFS) Contract Model

By Tatiana Shantsovalova, Head of Marketing – XB Software

Tatiana: In our blog, we cover many interesting topics regarding projects we have, and you shared some of those insights. Today, I want to talk more about the Budget with Float Scope (BFS) Contract Model. So, Vitaly, let's cover the key points of this contract model that we created in our company and answer some of the questions those who haven't read the article yet or are hearing about this model for the first time.

Let's start we the basics. What exactly is the Budget with Float Scope (BFS) model, and why did XB Software develop it?

Vitaly: Great question, Tatiana. BFS is a contract framework designed to give clients flexibility without financial surprises. Traditional fixed-scope contracts often force clients to lock in requirements upfront, which can lead to tension when changes inevitably arise. With BFS, we anchor the project to a clear budget while allowing the scope to “float” within predefined boundaries. This way, clients adapt to market shifts or new ideas without renegotiating contracts every two weeks.

Tatiana: Most companies use Time & Materials or Fixed-Price contract models. How does BFS differ from those two?

Vitaly: Time and materials is an open-ended option — clients bear all the risk of delays or scope creep. Fixed-price contracts, on the other hand, are rigid and often result in compromises to stay within scope. BFS sits in the middle. We agree on a budget upfront, but instead of a fixed feature list, we prioritize deliverables collaboratively. If the client wants to pivot, we adjust the scope within the original budget by deprioritizing less critical tasks. It’s about balancing structure and agility.

Tatiana: Walk us through how a BFS project works in practice.

Vitaly: Sure. We break projects into phases, starting with a Discovery Phase to define goals, requirements, and a roadmap. Next, we build an MVP (Minimum Viable Product) to validate core functionality quickly. This is where clients start seeing tangible progress. From there, we move into incremental development, adding features based on the following rules:

Throughout, we maintain a “float scope buffer” — a pool of optional tasks that can be swapped in or out as priorities shift.

Tatiana: Here's the pivotal question. What’s the biggest advantage for clients?

Vitaly: Transparency and budget control in the ever-changing business landscape. The client has a clear understanding of how the budget is allocated over time, across product features, and can see projections for the future. To ensure flexibility in achieving the client's goals, we maintain constant communication, optimizing the project triangle (Scope, Time, Cost) to maximize results. For example, when market trends or customer demands shift unexpectedly, we can reallocate team resources or adjust feature priorities or scope to stay within the project budget while capitalizing on emerging opportunities.

Tatiana: How do you handle major scope changes that exceed the float buffer?

Vitaly: When a major change requires more budget, we address it transparently with ideas on how to achieve similar results on the original budget. An original budget overrun is undesirable because clients may fall into the trap of saving in the future. We warn them against this. Any budget adjustments are made only with the client's explicit approval. The float buffer is designed to handle most shifts, so no more funds are needed. For example, if we save time on a feature by leveraging a third-party tool, those savings are reinvested into the float buffer, allowing us to allocate resources to other enhancements or adjustments later. It’s all about maximizing value at every step while maintaining flexibility and trust.

Tatiana: So, is BFS right for every project?

Vitaly: It shines for projects where flexibility is key — like startups entering evolving markets or enterprises modernizing legacy systems. If a client has ultra-fixed requirements and no appetite for collaboration, traditional models might fit better. But in today’s fast-paced tech landscape, adaptability is a competitive advantage.

Tatiana: How does communication work under BFS?

Vitaly: Daily updates, weekly demos, and biweekly reviews. Clients are never in the dark. We use tools like Jira or Trello for real-time tracking, and our teams are always available for quick calls. Trust is built by showing progress, not just reporting it.

Tatiana: Any final thoughts for clients considering BFS?

Vitaly: It’s about embracing change as a catalyst, not a crisis. With BFS, you’re not paying for hours or features — you’re investing in outcomes. We’re excited to partner with clients who value agility and want to turn their vision into reality without handcuffs.